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SEC Awards Whistleblower with $2.2 Million in First ‘Safe Harbor’ Ruling

The U.S. Securities and Exchange Commission (SEC) has announced a new whistleblower award of more than $2.2 million, the first award from the agency to be paid out under the “safe harbor” rule.

In the case, a former insider of a company took action in compliance with Exchange Act Rule 21F-4(b)(7). It indicates that if a whistleblower provides information to a different federal agency, but then submits the same information to the SEC within 120 days of that initial disclosure, the SEC will still treat the information as though it had been sent to the SEC at the same time it was submitted to the prior agency.

The whistleblower initially reported the information to a different federal agency, which then referred the case to the SEC. Within 120 days of that first report, the whistleblower sent the same information to the SEC and then cooperated with the investigation, which led to a significant enforcement action.

This so-called “safe harbor rule” is important because whistleblowers might not necessarily know which agencies they should report to, especially if they are not advised by attorneys. This helps whistleblowers still obtain awards for their reports even if they don’t first make those reports to the SEC.

SEC whistleblower program continues to grow

With this latest SEC whistleblower report, the program is now awarded more than $264 million to 54 different whistleblowers since the very first award was issued in 2012. All payments of these awards are made from an investor protection fund established by Congress and financed through monetary sanctions paid by violators of security laws.

To learn more about how you can file a whistleblower claim with the SEC’s program, consult a knowledgeable Dallas attorney at Kardell Law Group.

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  • "Steve Kardell was terrific in representing me in some very adversarial discussions with Citigroup and also later represented me in my testimony before the Financial Crisis Inquiry Commission."  -Richard Bowen, Citigroup Whistleblower

  • "Never thought my career would end like it did after 30 years of service. I was part of the first round of the so called reduction of force. I asked myself how can I be part of this with 30 years of seniority. How did they pick these 90 plus employees? Now, the culture of this organization made you question every decision they made. It wasn’t what you knew it’s was a culture of who you know. Nonetheless, I did not accept their severance package. I immediately starting looking for an attorney who would take on my case. After the initial call to Steve I had hope again. He was open and honest about everything and reassured me he would do his best for me, and he did. I had an awesome outcome. Thanks Steve you’re the best."  -S.S.

  • "Reaching out to Steve Kardell was the best decision I made. His ability to provide immediate insight and direction was very powerful, and a huge relief during a very stressful time period. For anyone struggling with a whistleblower situation, I would highly recommend at least speaking with Steve. After a 10 minute call with him, I had a better understanding of what I was dealing with. Even better, he gave me some immediate hope. In the end Steve did a better job than I thought was possible. Steve was able to get in contact with people in my organization, that I didn’t have access to. Because of his years of experience, he already has contacts in many organizations in Dallas. The entire situation was handled peacefully. I was impressed by his ability to “keep the peace”–rather than creating a battle with the organization. The reason I didn’t reach out to a lawyer initially, was because I thought it would mean an immediate end to any hope of a positive relationship with the company. Steve was able to address my concerns, and in the end I was able to continue to work for them."  -KS

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